Stocks took a tumble on Wednesday, as investors worried that troubles in China and Turkey could spread to other emerging markets and slow global growth amid ongoing trade tensions.

The falling dollar mitigated some of the worst pain late in the day, but it could only do so much. The Dow Jones Industrial Average lost137.51 points, or 0.5%, today to 25162.41, while the S&P 500 fell 21.59 points, or 0.8%, to 2818.37 and the Nasdaq Composite slid 96.78 points, or 1.2%, to 7774.12. The Dow had been down more than 300 points earlier in the day.

We dealt with the contagion question last week, but clearly worries haven't subsided, as investors wonder: Is Turkey emerging markets' canary in the coal mine? Wells Fargo's Jay Bryson writes that Turkey’s foreign currency-denominated debt has led to selling pressure on other EM assets, and even stronger emerging economies may not be enough to calm investor fears about the fact that these countries' debt has more than doubled since 1997, from $2 trillion to more than $5 trillion today.

Yet Bryson argues that many developing counties are much better "equipped to deal with their external debt loads than they were 20 years ago," helped by the fact that "the ability of many EM economies to service their external debt is a bit better today than it was two decades ago." Moreover, while Turkey may face more trouble, he thinks that any crises will be country-specific, rather than widespread.

It wasn't all bad news today. Retail sales figures for July rose 0.5%, beating expectations. "The persistently optimistic consumer sector is doing its part to keep the growth engine going, and retailers are benefiting," says Plante Moran Financial Advisors' Jim Baird. "As has long been the case, it’s the story of a resilient U.S. consumer that remains an important pillar supporting the current economic expansion."

A financial crisis is continuing to unfold in Turkey. The WSJ's Gerald. F. Seib looks at three important reasons why you should care about Turkey's economic troubles. Photo: Getty

The upbeat retail sales figure makes Macy's (M) pain all the more acute. While earnings growth has so often encouraged investors to shake off other woes, that didn't happen today. Macy's reported a beat-and-raise quarter, but with the shares outperforming or keeping pace with Amazon.com (AMZN) for much of the year, investors were clearly hoping for even stronger results and guidance than they got, sending shares tumbling.

Although second-quarter earnings season is winding down, we'll get another shot of good news—or not— with Walmart (WMT) slated to report before the open tomorrow. "Earnings continue to provide valuation support and the basis for stocks to trend higher," writes U.S. Bank's Robert Haworth, as "[b]y most metrics, second quarter results have been superb."

Nonetheless, he warns that as the reports start to thin, the many unknowns surrounding trading tensions remain a bugaboo: "Clearly, there is room for disappointment should the trade war rhetoric escalate. Tariffs have the potential to disrupt the global supply chain, resulting in economic weakness and slower-than-expected earnings growth, both of which would likely weigh on equity prices."

While Chipotle has already had quite a run this year—it's up 82% year to date—Morgan Stanley argues that new products, digital innovation, and restaurant efficiencies will help it continue to grow sales and margins.

Macy's (M) fell to the bottom of the index, as a good quarter wasn't good enough.

Macy's lost $6.67, or 16%, $35.15. That is its third largest single-day decline on record.

The department store beat expectations and raised its full year guidance. However, the shares had rallied more than 40% since the start of the year—for much of 2018, it was even outpacing Amazon—so investor expectations were primed for an even bigger beat-and-raise quarter than they got.

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.